The British manufacturer Pace has confirmed it is in talks to buy the set-top box division of Google's Motorola Mobility (MMI) subsidiary in a reverse takeover that could be worth up to $2bn (£1.2bn).

The Bradford-based company is understood to be among the front-runners for the profitable part of the Motorola business, which sells set-top boxes and systems to cable TV firms in the US.

Other bidders are understood to include Arris Group, an internet access company based in Suwanee, Georgia, and Technicolor SA, a video technology business, as well as some private equity firms.

Google spent $12.5bn buying MMI in August, acquiring a loss-making mobile phone division and a profitable set-top box division. Google sought to sell the latter almost at once, while it has been cutting back extensively on staffing and locations for the mobile phone business.

For Pace, getting a firmer foothold and solid reach in the US would strengthen its business.

In a statement, Pace said: "Discussions with Google are currently at a preliminary stage and there is no certainty as to whether any agreement regarding any transaction will be reached."

The "Home" division of MMI, which is up for sale, generated revenues of about $900m per quarter and profits of about $50m per quarter in the two years ahead of the Google acquisition, while the mobile phone division, which Google is keeping had revenues of about $2.4bn but consistently made losses of about $80m.

No deadline has been set for completing the acquisition, and Google may want to hold on to the patents owned by the set-top business in order to fend off lawsuits from other companies as it seeks to expand its own Google TV business.

There is also an ongoing lawsuit between MMI and TiVo, a set-top box maker that provides personalised TV recommendations.

Google's prime reason for buying MMI was to gain access to its portfolio of thousands of mobile and wireless patents to protect its Android software from lawsuits – though none has yet proved decisive in any legal case.

Pace shares were suspended from trading because the acquisition would be a reverse takeover under UK rules.